Bank charges are a hotly debated issue in France, although there is no evidence to suggest that by international standards they are excessive, and increases in recent years have been below the rate of inflation.
Nevertheless, over the years the legislator has regularly intervened to reign in the banks on certain charges, in the main to protect those on a modest income.
Thus, banks are obliged to offer a number of basic services (including a bank payment card) to those who are ‘financially fragile’ (fragilité financière) for €3 a month (inflation linked). Although there are particular circumstances that define that status, banks are free to widen the definition.
There is there is a cap of €30 that can be charged for cheques that cannot be honoured, provided the amount is no greater than €50. For amounts larger than €50 the cap is €50. For direct debits and standing orders the cap is €20.
Intervention fees in the event of an authorised overdraft are also capped at €8 per transaction, and €80 per month. For those who are ‘financially fragile’ the limits are €4 and €20 respectively (max €200 a year).
More broadly, for those without a specific package of services, the law caps at €25 per month incidents of any kind for those who are ‘financially fragile’. Where there are multiple incidents involving banks have an obligation to reimburse excess charges.
Finally, a law dating from 2015 sets a ceiling on the management fees for inactive accounts at €30 a year.
There are also controls on the amount that a bank can charge in the event of an incident of fraud.
Alongside these obligations banks must also provide regular detailed statements to their customers, including fees incurred. Their fee schedule must also be ‘transparent’.
In a recent change of law the government has also imposed controls on charges in inheritance cases, such as the amount paid by inheritors for closing, changing an account, or transferring funds.
These bank fees were not subject to any regulation, and bank charges are sometimes disconnected from the costs actually incurred. A recent study by a consumer body found fees for similar services variously enormously, in some cases reaching over €500.
The new law states that in 3 circumstances the service must be offered free of charge.
First, to inheritances that "do not present any manifest complexity”, which is somewhat broadly defined to mean that the inheritance is ‘simple’ (inheritors clearly identified), and that there is no credit agreement or business account in place.
Second, where the balance of the accounts is no greater than €5,910, a figure which will be inflation linked.
Thirdly, where the heir is a minor.
However, in other cases the new law is less generous, stating that the fees can be no higher than 1% of the total account balances, up to a ceiling limit which will be set by decree. A sliding scale is also likely to apply based on the amount of assets, to limit fees to a reasonable level. Until the decree is published it remains unclear whether this will bring about a reduction in charges.
These new controls apply to banks as well as other payment companies, such as Nickel, Wise and Revolut.
A useful government on-line tool to compare bank charges can be found at Tarifs Bancaires.
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